Study: Fear of death impacts retirement decisions

What keeps people from making certain decisions about their retirement savings?

A new study has concluded that a resistance to contemplating their own death is one likely cause.

For the research, the team from Boston College in Massachusetts focused on annuities whose lack of popularity has long puzzled experts despite the fact that they provide income payouts during the retirement years.

In one test, participants were asked to imagine that they were in the early stages of retirement; 40 percent of the group that discussed annuities reportedly thought about death versus just 1 percent of those who talked about IRAs.

The team then asked the test subjects to either write about the circumstances of their own death or about a painful dental experience.

When subsequently tasked with choosing a retirement product, the former group, according to a press release, "was 50 percent less likely to choose an annuity."

Researchers also found that more people were likely to prefer an annuity when the language in a brochure talked about years lived, not time until death.

The hope is that financial planners can use these insights during discussions with their clients.